<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08231
Spirit of America Investment Fund, Inc.
(Exact name of registrant as specified in charter)
477 Jericho Turnpike
Syosset, NY 11791
(Address of principal executive offices) (Zip code)
SSH Securities, Inc.
477 Jericho Turnpike
Syosset, NY 11791
(Name and address of agent for service)
Registrant's telephone number, including area code: (516) 390-5555
Date of fiscal year end: October 31, 2003
Date of reporting period: April 30, 2003
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
SPIRIT OF AMERICA REAL ESTATE FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
<Table>
<Caption>
SHARES MARKET VALUE
------- -------------
COMMON STOCKS - 98.64%
APARTMENTS (REITS) - 21.10%
Amli Residential Properties Trust 76,100 $ 1,722,904
Apartment Investment & Management Co. 107,600 4,062,976
Associated Estates Realty Corp. 291,600 1,752,516
Cornerstone Realty Income Trust, Inc. 219,900 1,543,698
Gables Residential Trust 145,300 4,123,614
Mid-America Apartment Communities, Inc. 169,600 4,358,720
Pennsylvania Real Estate Investment Trust 117,900 3,366,045
Post Properties, Inc. 121,500 3,129,840
United Dominion Realty Trust, Inc. 52,000 867,880
-------------
24,928,193
-------------
DIVERSIFIED (REITS) - 7.44%
BNP Residential Properties, Inc. 87,800 895,560
Colonial Properties Trust 41,900 1,425,019
Crescent Real Estate Equities Co. 156,200 2,214,916
Duke Realty Corp. 4,000 109,600
FrontLine Capital Group * 640 3
Hospitality Properties Trust 32,300 930,563
PMC Commerical Trust 2,400 32,184
Sizeler Property Investors, Inc. 109,300 1,082,070
U.S. Restaurant Properties, Inc. 143,500 2,100,840
Vornado Operating, Inc.* 250 45
-------------
8,790,800
-------------
HEALTHCARE (REITS) - 13.11%
CLC Healthcare, Inc.* 400 10
Five Star Quality Care, Inc. * 1,353 1,569
Health Care Property Investors, Inc. 98,000 3,647,560
Health Care REIT, Inc. 147,100 4,187,937
Healthcare Realty Trust, Inc. 102,500 2,821,825
National Health Investors, Inc. 60,800 988,000
Nationwide Health Properties, Inc. 211,700 2,963,800
National Health Realty, Inc. 53,600 813,112
OMEGA Healthcare Investors, Inc.* 9,000 24,660
Senior Housing Properties Trust 2,700 33,696
-------------
15,482,169
-------------
INDUSTRIAL (REITS) - 7.68%
Bedford Property Investors, Inc. 13,000 346,450
Brandywine Realty Trust 16,000 356,800
First Industrial Realty Trust, Inc. 139,500 3,900,420
Keystone Property Trust 221,900 3,816,680
Prime Group Realty Trust * 101,200 647,680
-------------
9,068,030
-------------
NET LEASE (REITS) - 8.38%
Commercial Net Lease Realty 271,116 4,381,235
IStar Financial, Inc. 10,000 299,300
Lexington Corporate Properties Trust 248,700 4,287,588
RFS Hotel Investors, Inc. 86,600 930,084
-------------
9,898,207
-------------
</Table>
<Page>
<Table>
<Caption>
SHARES MARKET VALUE
------- -------------
OFFICE SPACE (REITS) - 12.31%
Arden Reality 107,100 $ 2,552,193
Corporate Office Properties Trust 13,000 198,250
Glenborough Realty Trust, Inc. 107,100 1,775,718
Highwoods Properties, Inc. 178,000 3,604,499
HRPT Properties Trust 458,600 4,141,158
Koger Equity 40,000 640,000
Mack-Cali Realty Corp. 51,600 1,628,496
-------------
14,540,314
-------------
REGIONAL MALLS (REITS) - 11.89%
CBL & Associates Properties, Inc. 4,000 169,800
Crown American Realty Trust 324,200 3,313,324
Glimcher Realty Trust 259,850 5,368,501
Macerich Company, The 82,200 2,712,600
Mills Corporation, The 69,700 2,227,612
Simon Property Group, Inc. 6,000 220,320
Taubman Centers, Inc. 2,000 35,020
-------------
14,047,177
-------------
SHOPPING CENTERS (REITS) - 14.76%
Burnham Pacific Properties, Inc. * 11,000 6,408
Developers Diversified Realty Corp. 146,104 3,681,821
Equity One 139,500 2,216,655
Federal Realty Investment Trust 77,600 2,391,632
Malan Realty Investors, Inc. * 5,000 19,750
New Plan Excel Realty Trust 227,910 4,553,642
Pan Pacific Retail Properties, Inc. 6,540 255,845
Price Legacy Corporation * 2,200 6,160
Ramco-Gershenson Properties Trust 165,300 3,777,105
Realty Income Corporation 14,000 526,400
-------------
17,435,418
-------------
STORAGE (REITS) - 1.97%
Shurgard Storage Centers, Inc., Cl. A 4,000 130,680
Sovran Self Storage, Inc. 74,800 2,196,128
-------------
2,326,808
-------------
TOTAL COMMON STOCKS
(Cost $109,104,135) 116,517,116
-------------
PREFERRED STOCKS - 0.14%
NET LEASE (REITS) - 0.14%
Commercial Net Lease Realty 9% Series A 6,352 168,963
-------------
(Cost $152,677)
TOTAL INVESTMENTS - 98.78%
(Cost $109,256,812**) 116,686,079
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.22% 1,441,877
-------------
NET ASSETS - 100.00% $ 118,127,956
=============
</Table>
*Non-income producing security
**Cost for Federal income tax purposes is $109,256,812, and net unrealized
appreciation consists of:
<Table>
Gross unrealized appreciation $ 14,072,830
Gross unrealized depreciation (6,643,563)
------------
Net unrealized appreciation $ 7,429,267
============
</Table>
See accompanying notes to financial statements.
<Page>
SPIRIT OF AMERICA REAL ESTATE FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
<Table>
<Caption>
REAL ESTATE
-------------
ASSETS
Investments in securities at value (cost $109,256,812)(Note 1) $ 116,686,079
Cash 1,392,221
Receivables:
Capital stock sold 691,212
Dividends and interest 599,360
Other assets 27,611
-------------
TOTAL ASSETS 119,396,483
-------------
LIABILITIES
Payables:
Capital stock redeemed 171,599
Investment securities purchased 898,935
Accrued expenses 59,087
Accrued distribution expense (Note 3) 34,506
Due to Advisor 104,400
-------------
TOTAL LIABILITIES 1,268,527
-------------
NET ASSETS $ 118,127,956
=============
CLASS A SHARES
Net assets applicable to 11,223,401 outstanding $0.001
par value shares (500,000,000 authorized shares) $ 107,404,589
=============
Net asset value and redemption price per Class A Share
($107,404,589 DIVIDED BY 11,223,401 shares) $ 9.57
=============
Offering price per share ($9.57 DIVIDED BY 0.9475) $ 10.10
=============
CLASS B SHARES
Net assets applicable to 1,102,618 outstanding $0.001
par value shares (500,000,000 authorized shares) $ 10,723,367
=============
Net asset value and offering price per Class B Share
($10,723,367 DIVIDED BY 1,102,618 shares) $ 9.73
=============
Redemption price per share ($9.73 X 0.9425) $ 9.17
=============
SOURCE OF NET ASSETS
At April 30, 2003, net assets consisted of:
Paid-in capital $ 110,962,808
Undistributed net loss (46,903)
Accumulated net realized loss on investments (217,216)
Net unrealized appreciation on investments 7,429,267
-------------
NET ASSETS $ 118,127,956
=============
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA REAL ESTATE FUND
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED APRIL 30, 2003
<Table>
<Caption>
REAL ESTATE
-------------
INVESTMENT INCOME
Dividends $ 4,541,868
Interest 3,887
-------------
TOTAL INVESTMENT INCOME 4,545,755
-------------
EXPENSES
Investment advisory fees (Note 3) 500,599
Transfer agent fees 111,138
Administration fees 62,904
Distribution fees - Class A (Note 3) 140,036
Distribution fees - Class B (Note 3) 49,294
Accounting fees 33,688
Registration fees 6,168
Legal fees 9,269
Custodian fees 12,553
Printing expense 16,118
Amortization of organization costs (Note 1) 7,980
Auditing fees 9,219
Directors' fees 7,764
Insurance expense 5,753
Miscellaneous expense 3,506
-------------
TOTAL EXPENSES 975,989
Recoupment of waived and reimbursed expenses (Note 3) 75,197
-------------
NET EXPENSES 1,051,186
-------------
NET INVESTMENT INCOME 3,494,569
-------------
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS
Net realized loss from security transactions (13)
Net change in unrealized appreciation of investments 7,438,272
-------------
Net realized and unrealized gain on investments 7,438,259
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 10,932,828
=============
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA REAL ESTATE FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
REAL ESTATE FUND
--------------------------------------
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 2003 ENDED
(UNAUDITED) OCTOBER 31,2002
------------------ ----------------
OPERATIONS
Net investment income $ 3,494,569 $ 3,191,643
Net realized gain/loss from security transactions and REITs (13) 1,301,351
Net change in unrealized appreciation/depreciation of investments 7,438,272 (1,124,599)
------------------ ----------------
Net increase in net assets 10,932,828 3,368,395
------------------ ----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income:
Class A (3,238,249) (2,922,634)
Class B (303,223) (317,570)
------------------ ----------------
Total distributions from net investment income to shareholders (3,541,472) (3,240,204)
------------------ ----------------
Distributions from realized gains
Class A (196,396) (1,043,314)
Class B (20,807) (115,240)
------------------ ----------------
Total distributions from realized gains to shareholders (217,203) (1,158,554)
------------------ ----------------
Excess of net investment income
Class A - (128,803)
Class B - (13,994)
------------------ ----------------
Total distributions from realized gains to shareholders - (142,797)
------------------ ----------------
Return of capital:
Class A - (783,371)
Class B - (85,112)
------------------ ----------------
Total distributions from net return of capital to shareholders - (868,483)
------------------ ----------------
Total distributions to shareholders (3,758,675) (5,410,038)
------------------ ----------------
CAPITAL SHARE TRANSACTIONS (DOLLAR ACTIVITY)
Shares sold:
Class A 20,718,855 49,957,616
Class B 767,021 4,028,639
Shares issued as reinvestment of distributions:
Class A 2,462,706 3,407,909
Class B 247,183 395,801
Shares redeemed:
Class A (8,185,731) (13,570,924)
Class B (554,149) (949,265)
------------------ ----------------
Increase in net assets derived from capital share transactions (a) 15,455,885 43,269,776
------------------ ----------------
Total increase in net assets 22,630,038 41,228,133
NET ASSETS
Beginning of period 95,497,918 54,269,785
------------------ ----------------
End of period $ 118,127,956 $ 95,497,918
================== ================
(a) Transactions in capital stock were:
Shares sold:
Class A 2,263,329 5,213,263
Class B 83,312 414,278
Shares issued as reinvestment of dividends:
Class A 270,362 353,722
Class B 26,697 40,378
Shares redeemed:
Class A (894,142) (1,416,401)
Class B (59,599) (98,748)
------------------ ----------------
Increase in shares outstanding 1,689,959 4,506,492
================== ================
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
FINANCIAL HIGHLIGHTS - REAL ESTATE FUND
The table below sets forth financial data for one share of beneficial interest
outstanding throughout the periods presented.
<Table>
<Caption>
CLASS A CLASS A CLASS A
-------------- ----------- -----------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2003 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 2002 2001
-------------- ----------- -----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.96 $ 8.84 $ 7.41
-------------- ----------- -----------
Income from Investment Operations:
Net investment income 0.30 0.40 0.31
Net realized and unrealized gain/(loss) on investments 0.64 0.36 1.63
-------------- ----------- -----------
Total from investment operations 0.94 0.76 1.94
-------------- ----------- -----------
Less Distributions:
Distributions from net investment income (0.31) (0.40) (0.31)
Distributions from capital gains (0.02) (0.12) -
Distributions in excess of ordinary income - (0.01)
Distributions from return of capital - (0.11) (0.20)
-------------- ----------- -----------
Total distributions (0.33) (0.64) (0.51)
-------------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.57 $ 8.96 $ 8.84
============== =========== ===========
TOTAL RETURN(2) 10.77%(1) 8.26% 26.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 107,405 $ 85,915 $ 48,016
Ratio of expenses to average net assets:
Before expense reimbursement or recapture 1.82% 1.93% 2.29%
After expense reimbursement or recapture 1.97% 1.97% 1.97%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement or recapture 6.62% 4.04% 4.12%
After expense reimbursement or recapture 6.47% 4.00% 4.44%
Portfolio turnover -% 1.25% 12.04%
<Caption>
CLASS A CLASS A CLASS A
----------- ----------- ------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998*
----------- ----------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.48 $ 8.66 $ 10.00
----------- ----------- ------------
Income from Investment Operations:
Net investment income 0.45 0.49 0.20
Net realized and unrealized gain/(loss) on investments 0.15 (1.02) (1.38)
----------- ----------- ------------
Total from investment operations 0.60 (0.53) (1.18)
----------- ----------- ------------
Less Distributions:
Distributions from net investment income (0.45) (0.53) (0.16)
Distributions from capital gains - - -
Distributions in excess of ordinary income
Distributions from return of capital (0.22) (0.12) 0.00
----------- ----------- ------------
Total distributions (0.67) (0.65) (0.16)
----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 7.41 $ 7.48 $ 8.66
=========== =========== ============
TOTAL RETURN(2) 8.33% (6.38)% (11.78)%(1)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)
Ratio of expenses to average net assets: $ 10,936 $ 11,225 $ 7,290
Before expense reimbursement or recapture
After expense reimbursement or recapture 3.73% 3.35% 6.33%
Ratio of net investment income (loss) to average net assets: 1.97% 1.97% 1.97%
Before expense reimbursement or recapture
After expense reimbursement or recapture 4.29% 4.17% (0.62)%
Portfolio turnover 6.05% 5.55% 3.75%
21.55% 8.15% 0.00%
</Table>
* Class A Shares commenced investment operations on January 9, 1998.
(1) Calculation is not annualized.
(2) Calculation does not reflect sales load.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
<Table>
<Caption>
CLASS B CLASS B CLASS B
-------------- ----------- -----------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2003 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 2002 2001
-------------- ----------- -----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.11 $ 8.98 $ 7.53
-------------- ----------- -----------
Income from Investment Operations:
Net investment income 0.24 0.35 0.28
Net realized and unrealized gain/(loss) on investments 0.68 0.36 1.63
-------------- ----------- -----------
Total from investment operations 0.92 0.71 1.91
-------------- ----------- -----------
Less Distributions:
Distributions from net investment income (0.28) (0.34) (0.28)
Distributions from capital gains (0.02) (0.12) -
Distributions in excess of ordinary income - (0.01)
Distributions from return of capital - (0.11) (0.18)
-------------- ----------- -----------
Total distributions (0.30) (0.58) (0.46)
-------------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.73 $ 9.11 $ 8.98
============== =========== ===========
TOTAL RETURN(2) 10.36%(1) 7.59% 25.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 10,723 $ 9,583 $ 6,254
Ratio of expenses to average net assets:
Before expense reimbursement or recapture 2.52% 2.63% 2.99%
After expense reimbursement or recapture 2.67% 2.67% 2.67%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement or recapture 5.92% 3.34% 4.72%
After expense reimbursement or recapture 5.77% 3.30% 5.04%
Portfolio turnover -% 1.25% 12.04%
<Caption>
CLASS B CLASS B CLASS B
----------- ----------- ------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998*
----------- ----------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.51 $ 8.64 $ 9.62
----------- ----------- ------------
Income from Investment Operations:
Net investment income 0.40 0.40 0.15
Net realized and unrealized gain/(loss) on investments 0.16 (0.99) (1.00)
----------- ----------- ------------
Total from investment operations 0.56 (0.59) (0.85)
----------- ----------- ------------
Less Distributions:
Distributions from net investment income (0.40) (0.42) (0.13)
Distributions from capital gains - - -
Distributions in excess of ordinary income
Distributions from return of capital (0.14) (0.12) -
----------- ----------- ------------
Total distributions (0.54) (0.54) (0.13)
----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 7.53 $ 7.51 $ 8.64
=========== =========== ============
TOTAL RETURN(2) 7.72% (7.09)% (8.84)%(1)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 2,560 $ 2,645 $ 669
Ratio of expenses to average net assets:
Before expense reimbursement or recapture 4.43% 4.05% 7.03%
After expense reimbursement or recapture 2.67% 2.67% 2.67%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement or recapture 3.59% 3.47% (1.32)%
After expense reimbursement or recapture 5.35% 4.85% 3.05%
Portfolio turnover 21.55% 8.15% -%
</Table>
* Class B Shares commenced investment operations on March 6, 1998.
(1) Calculation is not annualized.
(2) Calculation does not reflect CDSC charges.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA REAL ESTATE FUND
NOTES TO FINANCIAL STATEMENTS APRIL 30, 2003
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Spirit of America Real Estate Fund (the "Fund"), a series of the Spirit of
America Investment Fund, Inc. (the "Company"), is an open-end diversified mutual
fund registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended. The Fund was incorporated under the laws of Maryland on May 15, 1997
and commenced operations on January 9, 1998. The authorized capital stock of the
Fund is one billion (1,000,000,000) shares, par value of $0.001 per share.
The Fund seeks growth of capital and current income by investing in equity Real
Estate Investment Trusts and other "real estate industry companies", as defined
in the prospectus of the Fund. The Fund offers two classes of shares (Class A
and Class B). Each class of shares has equal rights as to earnings and assets
except that each class bears different distribution expenses. Each class of
shares has exclusive voting rights with respect to matters that affect just that
class. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains and losses on investments are allocated to
each class of shares based on its relative net assets.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
A. SECURITY VALUATION: The offering price and net asset value per share of each
class of the Fund are calculated as of the close of regular trading on the NYSE,
currently 4:00 p.m., Eastern Time. The Fund's securities are valued at the
official close or the last reported sales price on the principal exchange on
which the security trades, or if no sales price is reported, the mean of the
latest bid and asked prices are used. Securities traded over-the-counter are
priced at the mean of the latest bid and asked prices. Short-term investments
having a maturity of 60 days or less are valued at amortized cost, which the
Board of Directors believes represents fair value. All other securities are
valued at fair value as determined in good faith under procedures established by
and under the supervision of the Board of Directors.
B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Cost is determined and gains and losses are based on the identified cost basis
for both financial statement and federal income tax purposes. Dividend income
and distributions to shareholders are reported on the ex-dividend date. Interest
income and expenses are accrued daily.
C. NET ASSET VALUE PER SHARE: The methodology and procedures for determining net
asset value are identical for each Class of Shares, but due to the specific
distribution expenses and other costs allocable to each Class of Shares, the net
asset value of each Class of Shares will vary. Class A Shares are purchased at
the offering price per share (which includes a sales load), while Class B shares
are purchased at the net asset value per share.
D. ORGANIZATION COSTS: Organization costs are being amortized on a straight-line
basis over five years from commencement of operation.
E. FEDERAL INCOME TAXES: The Fund intends to comply with all requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its
<Page>
taxable income to its shareholders. Therefore, no federal income tax provision
is required.
F. USE OF ESTIMATES: In preparing financial statements in conformity with
generally accepted accounting principles in the United States, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
G. DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to distribute substantially
all of its net investment income and capital gains to shareholders each year.
All such dividends and distributions are taxable to the shareholders whether
received in cash or shares. As a result, a portion of the distributions paid to
the Fund and subsequently distributed to shareholders is a return of capital.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Investment transactions for the six months ended April 30, 2003, excluding
short-term investments, were as follows:
<Table>
<Caption>
PROCEEDS
PURCHASES FROM SALES
--------------------------------------------------------------
Real Estate Fund $ 15,204,296 $ 22
</Table>
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Spirit of America Management Corp. ("Spirit Management") has been retained to
act as the Company's manager and investment adviser pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Spirit Management was
incorporated in 1997 and is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. Under the Advisory Agreement, the Fund pays
Spirit Management a monthly fee of 1/12 of 0.97% on the Fund's average daily net
assets. Investment advisory fees and other transactions with affiliates, for the
six months ended April 30, 2003, were as follows:
<Table>
<Caption>
INVESTMENT ADVISORY VOLUNTARY EXPENSE
FEE RATE LIMITATION ADVISORY FEES
------------------------------------------------------------
Real Estate Fund Class A 0.97% 1.97% $ 452,820
Real Estate Fund Class B 0.97% 2.67% 47,779
</Table>
<Table>
<Caption>
EXPENSES WAIVED EXPENSES REMAINING
AND REIMBURSED RECAPTURED RECAPTURABLE
BY THE ADVISOR BY THE ADVISOR EXPENSES AVAILABLE
------------------------------------------------------------
Real Estate Fund $ - $ 75,197 $ 237,774
</Table>
The Company has adopted two plans of distribution ("Real Estate Fund Class A
Plan" and "Real Estate Fund Class B Plan") pursuant to Rule 12b-1. Each Plan
permits the Real Estate Fund to pay
<Page>
SSH Securities, Inc., the Fund's principal distributor, a monthly fee from the
assets of the respective class.
<Table>
<Caption>
DISTRIBUTION DISTRIBUTION
FEE RATE FEES
------------- ------------
Real Estate Fund Class A 0.30% $ 140,036
Real Estate Fund Class B 1.00% 49,294
</Table>
Real Estate Fund Class A Shares are subject to initial sales charges imposed at
the time of purchase, in accordance with the Fund's current prospectus. Certain
redemptions of Real Estate Fund Class B shares made within six years of purchase
are subject to a contingent deferred sales charge ("CDSC"), in accordance with
the Fund's current prospectus. For the six months ended April 30, 2003, sales
charges received by SSH Securities, Inc. and CDSC were as follows:
<Table>
<Caption>
SALES CHARGES CONTINGENT DEFERRED
RECEIVED BY SSH SALES CHARGES
--------------- -------------------
$ 445 $ -
Real Estate Class A - 24,218
Real Estate Class B
</Table>
Certain officers and directors of the Company are "affiliated persons" of Spirit
Management or SSH Securities, Inc., the Company's distributor, as that term is
defined in the 1940 Act. There are no directors' fees paid to affiliated
directors of the Company. All officers serve without direct compensation from
the Company. In addition, David Lerner Associates, Inc. received the following
brokerage commissions for the six months ended April 30, 2003:
<Table>
<Caption>
BROKERAGE COMMISSIONS
---------------------
Real Estate Fund $ 32,895
</Table>
NOTE 4 - FEDERAL INCOME TAXES
The tax character of distributions paid for the fiscal years ended October 31,
2002 and October 31, 2001 were as follows:
2002 TAXABLE DISTRIBUTIONS
<Table>
<Caption>
ORDINARY NET LONG TERM DISTRIBUTIONS IN EXCESS TOTAL TAXABLE RETURN TOTAL
INCOME CAPITAL GAINS OF ORDINARY INCOME DISTRIBUTIONS OF CAPITAL DISTRIBUTIONS
Real Estate Fund - Class A $ 2,922,634 $ 1,043,314 $ 128,803 $ 4,094,751 $ 783,371 $ 4,878,122
Real Estate Fund - Class B 317,570 115,240 13,994 446,804 85,112 531,916
</Table>
2001 TAXABLE DISTRIBUTIONS
<Table>
<Caption>
ORDINARY NET LONG TERM DISTRIBUTIONS IN EXCESS OF TOTAL TAXABLE RETURN TOTAL
INCOME CAPITAL GAINS ORDINARY INCOME DISTRIBUTIONS OF CAPITAL DISTRIBUTIONS
Real Estate Fund - Class A $ 1,092,940 $ - $ - $ 1,092,940 $ 701,362 $ 1,794,302
Real Estate Fund - Class B 146,114 - - 146,114 93,765 239,879
</Table>
<Page>
SPIRIT OF AMERICA VALUE FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
<Table>
<Caption>
SHARES MARKET VALUE
------- ------------
COMMON STOCKS - 87.54%
ALUMINUM - 1.95%
Alcan, Inc. 3,100 $ 90,954
Alcoa, Inc. 2,600 59,618
------------
150,572
------------
APARTMENTS (REITS) - 3.57%
Apartment Investment & Management Co. 7,300 275,648
------------
CONSUMER PRODUCTS - 9.88%
Altria Group, Inc. 4,300 132,268
Avon Products, Inc. 3,200 186,144
Colgate-Palmolive Co. 3,700 211,529
Gillette Co. 3,100 94,395
Kimberly-Clark Corp. 800 39,816
Procter & Gamble Co. 1,100 98,835
------------
762,987
------------
ENERGY - 10.47%
American Electric Power 11,300 298,094
Consolidated Edison, Inc. 8,700 338,169
Duke Energy Corp. 9,800 172,382
------------
808,645
------------
DIVERSIFIED FINANCIAL SERVICES - 7.89%
American Express Co. 1,700 64,362
Bank One Corp. 5,200 187,460
Citigroup, Inc. 9,100 357,175
------------
608,997
------------
FOOD & BEVERAGE - 20.11%
Archer-Daniels-Midland Co. 6,500 72,020
Cadbury Schweppes plc 6,200 140,554
Coca-Cola Co. 3,200 129,280
Del Monte Foods Co. * 1,161 9,230
General Mills, Inc. 6,100 275,171
H.J. Heinz Co. 9,200 274,896
Kellog, Co. 2,800 91,672
Kraft Foods, Inc. 1,300 40,170
Kroger Co * 8,800 125,840
PepsiCo, Inc. 3,600 155,808
Sara Lee Corp. 8,800 147,664
Wm. Wrigley Jr. Co. 1,600 90,736
</Table>
<Page>
<Table>
------------
1,553,041
------------
HEALTHCARE (REITS) - 1.79%
National Health Investors, Inc. 4,700 76,375
Nationwide Health Properties, Inc. 4,400 61,600
------------
137,975
------------
INDUSTRIAL (REITS) - 2.50%
First Industrial Realty Trust, Inc. 6,900 192,924
------------
INSURANCE - 0.14%
Travelers Property Casualty Corp. CL A 216 3,506
Travelers Property Casualty Corp. CL B 443 7,199
------------
10,705
------------
</Table>
<Page>
<Table>
<Caption>
SHARES MARKET VALUE
------- ------------
MULTIMEDIA - 3.87%
AOL Time Warner, Inc. * 10,600 $ 145,008
Viacom, Inc. CL A * 1,400 60,788
Walt Disney Co. 5,000 93,300
------------
299,096
------------
NET LEASE (REITS) - 2.52%
Lexington Corp. Properties Trust 11,300 194,812
------------
OFFICE SPACE (REITS) - 2.41%
Mack-Cali Realty Corp. 5,900 186,204
------------
PHARMACEUTICALS - 3.02%
Bristol-Myers Squibb Co. 3,000 76,620
Eli Lilly and Co. 1,000 63,820
Merck and Co., Inc. 1,600 93,088
------------
233,528
------------
REGIONAL MALLS (REITS) - 1.98%
Glimcher Realty Trust 7,400 152,884
------------
RETAIL - 2.20%
Walgreen Co. 5,500 169,730
------------
RESTAURANTS - 0.53%
Wendy's International, Inc. 1,400 40,656
------------
SHOPPING CENTERS (REITS) - 8.57%
Commercial Net Lease Realty 12,400 200,384
Federal Realty Investment Trust 5,000 154,100
New Plan Excel Realty Trust 9,900 197,802
Ramco-Gershenson Properties Trust 2,500 57,125
Realty Income Corp. 1,400 52,640
------------
662,051
------------
TRANSPORT SERVICES - 2.45%
FedEx Corp. 1,700 101,796
United Parcel Service, Inc. 1,400 86,968
------------
188,764
------------
WASTE MANAGEMENT - 1.69%
Waste Management, Inc. 6,000 130,319
------------
</Table>
<Page>
<Table>
TOTAL INVESTMENTS - 87.54%
(Cost $6,665,441**) 6,759,538
CASH AND OTHER ASSETS NET OF LIABILITIES - 12.46% 961,786
------------
NET ASSETS - 100.00% $ 7,721,324
============
</Table>
*Non-income producing security
**Cost for Federal income tax purposes is $6,665,441, and net unrealized
appreciation consists of:
<Table>
Gross unrealized appreciation $ 295,631
Gross unrealized depreciation (201,534)
----------
Net unrealized appreciation $ 94,097
==========
</Table>
See accompanying notes to financial statements.
<Page>
SPIRIT OF AMERICA VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
<Table>
<Caption>
VALUE
-------------
ASSETS
Investments in securities at value (cost $6,665,441)(Note 1) $ 6,759,538
Cash 755,375
Receivables:
Capital stock sold 172,316
Dividends and interest 18,728
Due from Advisor 1,157
Other assets 19,491
-------------
TOTAL ASSETS 7,726,605
-------------
LIABILITIES
Payables:
Capital stock redeemed 232
Accrued expenses 3,271
Accrued distribution expense (Note 3) 1,778
-------------
TOTAL LIABILITIES 5,281
-------------
NET ASSETS $ 7,721,324
=============
VALUE SHARES
Net assets applicable to 795,358 outstanding $0.001
par value shares (500,000,000 authorized shares) $ 7,721,324
=============
Net asset value and redemption price per Value Fund Share
($7,721,324 DIVIDED BY 795,358 shares) $ 9.71
=============
Offering price per share ($9.71 DIVIDED BY 0.9475) $ 10.25
=============
SOURCE OF NET ASSETS
At April 30, 2003, net assets consisted of:
Paid-in capital $ 7,631,381
Undistributed net income 10,987
Accumulated net realized loss on investments (15,141)
Net unrealized appreciation on investments 94,097
-------------
NET ASSETS $ 7,721,324
=============
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA VALUE FUND
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED APRIL 30, 2003
<Table>
<Caption>
VALUE
-------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $494) $ 81,557
Interest 2,335
-------------
TOTAL INVESTMENT INCOME 83,892
-------------
EXPENSES
Investment advisory fees (Note 3) 23,791
Transfer agent fees 8,144
Administration fees 6,000
Distribution fees - Value Shares (Note 3) 7,358
Accounting fees 12,470
Registration fees 3,299
Legal fees 427
Custodian fees 2,370
Printing expense 744
Auditing fees 1,940
Directors' fees 359
Insurance expense 1,167
Miscellaneous expense 181
-------------
TOTAL EXPENSES 68,250
Expenses waived and reimbursed by Advisor (Note 3) (19,932)
-------------
NET EXPENSES 48,318
-------------
NET INVESTMENT INCOME 35,574
-------------
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS
Net change in unrealized appreciation of investments 121,393
-------------
Net realized and unrealized gain on investments 121,393
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 156,967
=============
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
VALUE FUND
--------------------------------------
FOR THE SIX MONTHS
ENDED FOR THE PERIOD
APRIL 30, 2003 ENDED
(UNAUDITED) OCTOBER 31, 2002*
------------------ ----------------
OPERATIONS
Net investment income $ 35,574 $ 2,115
Net realized loss from security transactions - (14,501)
Net change in unrealized appreciation/depreciation of investments 121,393 (28,281)
------------------ ----------------
Net increase/decrease in net assets 156,967 (40,667)
------------------ ----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income:
Value Fund (26,702) -
------------------ ----------------
Total distributions from net investment income to shareholders (26,702) -
------------------ ----------------
CAPITAL SHARE TRANSACTIONS (DOLLAR ACTIVITY)
Shares sold:
Value Shares 5,623,013 2,615,521
Shares issued as reinvestment of distributions:
Value Shares 23,917 -
Shares redeemed:
Value Shares (483,193) (147,532)
------------------ ----------------
Increase in net assets derived from capital share transactions(a) 5,163,737 2,467,989
------------------ ----------------
Total increase in net assets 5,294,002 2,427,322
NET ASSETS
Beginning of period 2,427,322 -
------------------ ----------------
End of period $ 7,721,324 2,427,322
================== ================
(a) Transactions in capital stock were:
Shares sold:
Value Shares 589,783 266,737
Shares issued as reinvestment of dividends:
Value Shares 2,549 -
Shares redeemed:
Value Shares (48,938) (14,773)
------------------ ----------------
Increase in shares outstanding 543,394 251,964
================== ================
</Table>
* Spirit of America Value Fund commenced investment operation on August 1, 2002
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
FINANCIAL HIGHLIGHTS - VALUE FUND
The table below sets forth financial data for one share of beneficial interest
outstanding throughout the periods presented.
<Table>
<Caption>
VALUE SHARES VALUE SHARES
-------------- ------------
FOR THE SIX FOR THE
MONTHS ENDED PERIOD ENDED
APRIL, 30 2003 OCTOBER 31,
(UNAUDITED) 2002*
-------------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.63 $ 10.00
-------------- ------------
Income from Investment Operations:
Net investment income 0.05 0.01
Net realized and unrealized gain/(loss) on investments 0.08 (0.38)
-------------- ------------
Total from investment operations 0.13 (0.37)
-------------- ------------
Less Distributions:
Distributions from net investment income (0.05) -
-------------- ------------
Total distributions (0.05) -
-------------- ------------
NET ASSET VALUE, END OF PERIOD $ 9.71 $ 9.63
============== ============
TOTAL RETURN(2) 1.32%(1) (3.70)%(1)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 7,721 $ 2,427
Ratio of expenses to average net assets:
Before expense reimbursement 2.78% 7.38%(3)
After expense reimbursement 1.97% 1.97%(3)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement 0.64% (4.75)%(3)
After expense reimbursement 1.45% 0.66%(3)
Portfolio turnover -% 21.59%(1)
</Table>
* Class A Shares commenced investment operations on August 1, 2002.
(1) Calculation is not annualized.
(2) Calculation does not reflect sales load.
(3) Calculation is annualized
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
SPIRIT OF AMERICA VALUE FUND
NOTES TO FINANCIAL STATEMENTS APRIL 30, 2003
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Spirit of America Value Fund (the "Fund"), a series of Spirit of America
Investment Fund, Inc. (the "Company"), is an open-end diversified mutual fund
registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended. The Fund was incorporated under the laws of Maryland on May 15, 1997.
The Fund commenced operations on August 1, 2002. The authorized capital stock of
the Fund is 500 million (500,000,000) shares, par value of $0.001 per share. The
Fund seeks capital appreciation with a secondary objective of current income.
The Fund offers one class of shares, the Value Fund Shares.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
A. SECURITY VALUATION: The offering price and net asset value per share for the
Fund are calculated as of the close of regular trading on the NYSE, currently
4:00 p.m., Eastern Time. The Fund's securities are valued at the official close
or the last reported sales price on the principal exchange on which the security
trades, or if no sales price is reported, the mean of the latest bid and asked
prices are used. Securities traded over-the-counter are priced at the mean of
the latest bid and asked prices. Short-term investments having a maturity of 60
days or less are valued at amortized cost, which the Board of Directors believes
represents fair value. All other securities are valued at fair value as
determined in good faith under procedures established by and under the
supervision of the Board of Directors.
B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Cost is determined and gains and losses are based on the identified cost basis
for both financial statement and federal income tax purposes. Dividend income
and distributions to shareholders are reported on the ex-dividend date. Interest
income and expenses are accrued daily.
C. FEDERAL INCOME TAXES: The Fund intends to comply with all requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
D. USE OF ESTIMATES: In preparing financial statements in conformity with
generally accepted accounting principles in the United States, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
E. DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to distribute substantially
all of its net investment income and capital gains to shareholders each year.
All such dividends and distributions are taxable to the shareholders whether
received in cash or shares. As a result, a portion of the distributions paid to
the Fund and subsequently distributed to shareholders is a return of capital.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Investment transactions for the six months ended April 30, 2003, excluding
short-term
<Page>
investments, were as follows:
<Table>
<Caption>
PROCEEDS
PURCHASES FROM SALES
--------------------------------------------------
Value Fund $ 4,953,510 $ 1
</Table>
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Spirit of America Management Corp. ("Spirit Management") has been retained to
act as the Company's manager and investment adviser pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Spirit Management was
incorporated in 1997 and is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. Under the Advisory Agreement, the Fund pays
Spirit Management a monthly fee of 1/12 of 0.97% on the Fund's average daily net
assets. Investment advisory fees and other transactions with affiliates, for the
six months ended April 30, 2003, were as follows:
<Table>
<Caption>
INVESTMENT ADVISORY VOLUNTARY EXPENSE
FEE RATE LIMITATION ADVISORY FEES
-------------------------------------------------------------
Value Fund 0.97% 1.97% $ 23,791
</Table>
<Table>
<Caption>
EXPENSES WAIVED AND REMAINING RECAPTURABLE
REIMBURSED BY THE ADVISOR EXPENSES AVAILABLE
-----------------------------------------------------------------
Value Fund $ 19,932 $ 37,269
</Table>
The Company has adopted one plan of distribution ("Value Fund Plan") pursuant to
Rule 12b-1. The Plan permits the Fund to pay SSH Securities, Inc., the Fund's
principal distributor, a monthly fee from the assets of the Fund.
<Table>
<Caption>
DISTRIBUTION DISTRIBUTION
FEE RATE FEES
------------ ------------
Value Fund 0.30% $ 7,358
</Table>
Value Fund Shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the Fund's current prospectus. For the six months
ended April 30, 2003, sales charges received by SSH Securities, Inc. were as
follows:
<Table>
<Caption>
SALES CHARGES
RECEIVED BY SSH
---------------
Value Fund $ 262
</Table>
Certain officers and directors of the Company are "affiliated persons" of Spirit
Management or SSH Securities, Inc., the Company's distributor, as that term is
defined in the 1940 Act. There are no directors' fees paid to affiliated
directors of the Company. All officers serve without direct
<Page>
compensation from the Company. In addition, David Lerner Associates, Inc.
received the following brokerage commissions for the six months ended April 30,
2003:
<Table>
<Caption>
BROKERAGE COMMISSIONS
---------------------
Value Fund $ 9,300
</Table>
NOTE 4 - FEDERAL INCOME TAXES
For Federal income tax purposes, the Fund has capital loss carryforwards, which
expire in the year indicated, as of October 31, 2002, which are available to
offset future capital gains, if any:
<Table>
<Caption>
EXPIRING IN 2010
----------------
Value Fund $ 15,141
</Table>
<Page>
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
<Page>
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions,
have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17
CFR 270.30a-3(c))) are effective, based on their evaluation of these
controls and procedures as of the date within 90 days of the filing date
of the report that includes the disclosure required by this paragraph.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10.EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
are attached hereto.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Spirit of America Investment Fund, Inc.
By (Signature and Title)* /s/ David Lerner
----------------------------------------
David Lerner, President and Treasurer
(principal executive officer)
Date JUNE 30, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ David Lerner
--------------------------------------
David Lerner, President and Treasurer
(principal executive officer)
Date JUNE 30, 2003
* Print the name and title of each signing officer under his or her signature.